Macau and The Gambling World of the Orient

Published on 10th December 2016 by Adam

A Historical Overview of Macau’s Gambling Scene

Macau is to Asia what Monte Carlo is to Europe and Las Vegas to The USA – a gambling mecca. The gambling scene there has been a point of fascination for both Chinese and Hong Kong nationals flocking there in droves as well as for players willing to cross the ocean to try their luck at the tables and machines. In short, basically, gambling has exploded and it contributes consistently and substantially to the economy of the country. However, this path that has led to Macau becoming a casino hub is one that paved itself in spite of a long history of conflict and change of ownership hands.

Gambling is an integral part of Chinese culture. When walking the streets, it’s no rare sight to see old men playing cards, mahjong, and other games. Surprisingly, though, China outlawed gambling for money almost entirely, leaving Macau as the only legal jurisdiction for the gambling business to take place. So, how did Macau gain such a privilege? Outlining the entire history would be beyond the scope of this article, but suffice it to say that it was the Portuguese who originally officialised gambling in this autonomous Chinese region during their occupation in the late 19th century. The reason behind this was to generate revenue for the government. As the casino infrastructure settled even more, a gambling license was set in place, and reportedly, around 200 Fantan (Chinese betting houses) were required to pay gambling rent to the government.

The biggest breakthrough in Macau came by means of monopolization of all rights of gambling at the hands of a syndicate named STDM that saw the joint efforts of businessmen from Hong Kong and Macau. This saw western-styled games being introduced and the modernisation of marine transport between the two regions. And the result was a surge in numbers of gamblers from Hong Kong.

In 1999, Macau was handed over to The People’s Republic of China and it became a special administrative region. 3 years later, the monopoly previously held by the STDM was ended by the same Chinese government, even if STDM still runs a prominent part of the operations after a total of 6 concessions were made to SJM, an 80% owned subsidiary of STDM.

Gambling and Economy in Macau

Macau garners approximately 50% of its revenue through gambling tourism flowing out of mainland China and Hong Kong. This has fluctuated over the years due to different factors. However, large foreign casinos have set up shop in Macau over the years, including The Venetian Macau – the biggest casino and 7th biggest building in the world. This impacted the revenue to the point of overtaking Las Vegas in total yearly revenue in 2007.

Until the late 1990s, the figures were a steady 50% in revenue and 40% in Macau’s GDP. Almost 10% decrease happened at the turn of the millennium, and this was most likely due to the spreading of online gambling.

After the Portuguese government handed over Macau to SAR and the latter toiled to end monopolisation, new concession contracts with new competing companies were signed, and a number of licenses were issued, creating an increased sense of competition, which in turn also increased total tax revenue. The percentage in gambling tourism also saw a significant increase due to this, and at the moment, gambling makes for about 70% of Macau’s total revenue.

On the other hand, gambling, not being susceptible to technological or productivity growth, remains strongly dependent on the economies of other Asian countries. Also, since Xi Jinping’s actions to crack down on corruption has also seen a steady decline in casinos’ profits.

Casinos in Macau

Fantan – Chinese-style gambling houses – were predominant in Macau until the introduction of Western-style casino games. Nowadays, operations are entirely land-based as online gambling has not been sanctioned yet. Punters in Macau can usually choose one of four categories – casino games (which will be the emphasis of this article), greyhound racing, sports betting, and lotteries.

Casinos in Macau make up a total of 33, the biggest of which is The Venetian Macau. The three main casino operators are SJM Holdings, Galaxy Entertainment, and Las Vegas Sands. Games available include roulette, blackjack, baccarat, boule, sic bo, fan tan, and slot machines.

In 2007, poker was initially introduced at Galaxy Starworld in electronic table format, and the same year the first poker tournament – Asia Pacific Poker Tour Macau was held. Less than a year later, the official rules for Texas Hold’em Poker were published. The same year, the first live-dealer game tables were added to Grand Lisboa. And Grand Waldo Casino welcomed Pokerstars Macau before it was moved to Grand Lisboa Casino in 2009. Nowadays, Wynn Macau, Starworld, and the Venetian all have endorsed live-dealer poker tables.

Conclusion

Many gamblers who love to combine their passion for games with one for travelling have added Macau to their must-visit destinations, especially those who want to break away from the familiar and visit more exotic lands. Meanwhile, for those who are still planning their first trip but still want a taste of the orient online can get just that by playing games such Lights and Koi Princess.